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The Bulgarian Banking Disaster

Another in the Bulgarian banking series at Forbes. Two months on, CorpBank is still closed and there is no end in sight. Depositors are angry, bondholders are nervous after the bank's recent default, and the Bulgarian authorities are making increasingly desperate attempts to find the money to reimburse depositors and - perhaps - recapitalize the bank so it can be reopened. Meanwhile, Tsvetan Vassilev, the bank's majority owner, is in hiding after an international arrest warrant for him was issued on charges of embezzlement. And Delyan Peevski's power base becomes ever larger....

Comments

Thanks for sharing this series of essays on banking conditions in a number of locations. I really had no idea. Do these travails, in the aggregate, have enough impact to disrupt life in general? Thanks again.

Steve Hanke is a hack, he was formerly an advisor to president Stoyanov (one of many and after the law was already in effect) and wasn't involved at all in drafting the CB law. His actual proposal was dismissed as wacky - he wanted to move reserves to Switzerland to be managed by a exclusively foreigners (I'm not making this up, he said he wanted non-Bulgarians to do it) and hand bank oversight to the ministry of finance.

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